Growth to be Unleashed in the Hungarian Tourism Market

Levente Hörömpöli-Tóth

Friday, June 2, 2017

With guest nights up by 41.3% since 2010, tourism in Hungary is on an exponential growth track. Record funds promise even more, including attempts to make visitors more aware of the other delights the country has to offer beyond the capital, as Dr. Zoltán Guller, CEO of the Hungarian Tourism Agency (MTÜ) tells the Budapest Business Journal.

Dr. Zoltán Guller, CEO of the Hungarian Tourism Agency.

Tourism makes up 10% of Hungarian GDP at the moment, and that could reach 16% by 2019. There seems to be no shortage of funds to make that happen. What key areas are being targeted in this effort?

Indeed, unprecedented amount of funds, some HUF 500 billion, are at our disposal for development purposes for the period through to 2020. The first funding schemes are scheduled to be accessible for these development projects soon, with dozens of billions of forints earmarked in the central budget for this and the upcoming year. These resources will be used by MTÜ in primary tourism locations in a focused way, as part of a professionally crafted strategy. So far three such regions have been designated by the government (Balaton; Sopron-Fertő; and Tokaj-Felső-Tisza and Nyírség) with more to come by the end of the year.

What does the sector expect of MTÜ, and how can you help market players forge closer cooperation for the benefit of the entire industry?

I am convinced that governmental development coordination needs to measure up to the visitors, not the tourism industry itself. It is tourists, after all, who decide whether or not to visit Hungary and spend their free time and money here. Therefore, their needs must be met and they should be provided with a range of experiences that make them want to choose us. Through the calls for proposals for providing the new funding schemes for tourism development, these objectives are to be achieved more easily. I believe the sector appreciates that comprehensive and long-term focused work has begun at MTÜ at last, and our efforts aim to enhance our competitiveness.

For that to happen both services and attractions need to be taken to the next level, which is essential to generate substantially more revenues too.

The quality of infrastructure and services need to improve simultaneously, so that visitors will want to open their wallets, whilst cooperation between local service providers needs to be strengthened at a higher level as well. It should become self-explanatory that, in any given region, service providers and those running attractions cross-reference one another. This is also a zero-sum game where everyone, including the guest, wins: they should return later or stay longer than planned. This can result in an exponential growth of tourism-related revenues – and that is what our primary goal is.

Are families to be specifically targeted? One often has the feeling that they are seen rather as of secondary importance.

I have four children, so I have learned to appreciate that high chairs in a restaurant or coloring books in a visitor center can work miracles! Family-friendliness is very important since ever more families travel together, sometimes even with the grandparents. The HORECA sector, therefore, must adapt.

Growth is being fed by domestic and foreign tourists alike, as guest nights associated with both customer groups have risen by nearly 7% from 2015 to 2016. However, guests from abroad still tend to stick to the capital: two-thirds of them overnighted there in 2016 and nearly 75% of all foreign guest-related hotel spending took place in Budapest. How can this Budapest-centric attitude be changed?

It is not by accident that the guest nights in Budapest of foreign visitors grew by 54% between 2010 and 2016. Many are discovering the city for themselves and security is another asset that is ever more appreciated. Our double goal, namely to ease the territorial concentration of tourism and to make visitors stay longer, makes it necessary to make foreign residents, including expat executives of multinational companies or students from abroad, aware of the hidden treasures of the countryside. Our soon-to-come campaign targeting domestic tourism is set to focus on this aspect, apart from developing the primary destinations of Hungary.

China is now among the top ten source countries where most tourists to Budapest arrive from. Do you have anything tailor-made in the pipeline to fulfill their special needs?

In the past two years the newly launched direct flight to Beijing has propelled China to this key position. The first four months of 2017 bear witness to uninterrupted interest. The point is to target quality Chinese tourism. Among the latest buzzwords now are our spa and festival cultures, which attract many from China thanks to changing travel habits there. Not only the wealthy middle class, but also young travelers can be targeted with success, not least thanks to the effect of star-studded Chinese movies that have been shot here recently. MTÜ is also actively engaged in negotiations over launching regular flight routes to Shanghai and Ningbo.

The Olympic bid is off the table, but other large-scale sports events will be held in Hungary to compensate for hoped-for revenues. Will hotel and infrastructure capacity be able to handle the elevated pressure?

This summer only shows the potential impact of international sports events on tourism. In July, the FINA World Aquatics Championship and the FINA Masters World Championships will start and estimates project that hotel room rates will increase by an average of 25% because of it. A sports event with such audience figures worldwide can boost the country image enormously. Thanks to the sports tourism that will be triggered by the newly built infrastructure, new target markets and segments can be won over for Hungary. Professional support for the organizing of premium international sports events in Hungary ended up in the recently extended task list of MTÜ with reason!

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